IB Economics 2. Microeconomics

2.1.1 The Law of Demand (HL)

2.1.2 Demand Curve

2.1.3 Relationship Between an Individual Consumer’s Demand and Market Demand

2.1.4 Non-Price Determinants of Demand

2.1.5 Movements and Shifts of the Demand Curve

2.2.1 The Law of Supply (HL)

2.2.2 The Supply Curve (HL)

2.2.3 Relationship Between an Individual Producer’s Supply and Market Supply

2.2.4 Non-Price Determinants of Supply

2.2.5 Movements Along and Shifts of the Supply Curve

2.3.1 Demand and Supply Curves Forming a Market Equilibrium

2.3.2 Shifting Demand and Supply Curves to Produce a New Market Equilibrium

2.3.3 Functions of the Price Mechanism

2.3.4 Consumer and Producer Surplus (HL)

2.3.5 Social/Community Surplus

2.3.6 Allocative Efficiency at the Competitive Market Equilibrium

2.4.1 Rational Consumer Choice (HL Only)

2.4.2 Behavioural Economics in Action (HL Only)

2.4.3 Business Objectives (HL Only)

2.5.1 Concept of Elasticity

2.5.2 Price Elasticity of Demand (PED) (HL)

2.5.3 Importance of PED for Firms and Government Decision Making

2.5.4 Why PED for Primary Commodities Is Generally Lower than Manufactured Products (HL Only)

2.5.5 Income Elasticity of Demand (YED)

2.5.6 Importance of YED (HL Only)

2.6.1 Price Elasticity of Supply (PES)

2.6.2 Why PES for Primary Commodities Is Lower than for Manufactured Products (HL Only)

2.7.1 Reasons for Government Intervention in Markets

2.7.2 Main Forms of Government Intervention in Markets (HL)

2.8.1 Marginal Social Benefit (MSB) Equals Marginal Social Cost (MSC)

2.8.2 Government Intervention in Response to Externalities and Common Pool Resources

2.8.3 Strengths and Limitations of Government Policies to Correct Externalities

2.8.4 Importance of International Cooperation

2.9.1 Public Goods

2.9.2 Government Intervention in Response to Public Goods

2.10.1 Asymmetric Information

2.10.2 Responses to Asymmetric Information

2.11.1 Perfect Competition

2.11.2 Monopoly - Single or Dominant Firm, High Barriers to Entry, No Close Substitutes

2.11.3 Imperfect Competition

2.11.4 Rational Producer Behaviour

2.11.5 Degrees of Market Power

2.11.6 Monopoly

2.11.7 Oligopoly

2.11.8 Monopolistic Competition

2.11.9 Advantages of Large Firms Having Significant Market Power

2.11.10 Risks in Markets Dominated by One or a Few Very Large Firms

2.11.11 Government Intervention in Response to Abuse of Significant Market Power

2.12.1 The Market’s Inability to Achieve Equity